BITCOIN Law Regulations Approved

September 2, 2021

On August 27, 2021, Decree No. 27 was published in the Official Gazette of El Salvador, whereby the Regulation of the Bitcoin Law is approved, containing basically the following:

1. BITCOIN service provider

It is the natural or legal person that provides for themselves or third parties services related to bitcoin such as exchange houses and payment processors or wallets, but not limited to custodians.

Those people who use bitcoin for personal use are excluded, including economic agents who carry out transactions in bitcoin only as a means of payment to trade their goods and services.

The Registry of Bitcoin Service Providers is created, which will be in charge of the BCR (Banco Central de Reserva – Central Reserve Bank).

2. Rules of conductor for the service provider

Each service provider shall:

  • Maintain an anti-money laundering program and international best practices.
  • Safeguard client assets with a high degree of care.
  • Maintain books and records that accurately reflect the assets, liabilities, and equity of the bitcoin service provider.
  • Maintain a record of complaints.
  • Maintain a cybersecurity program adapted to the nature of the services.
  • Maintain a physical security program.
  • Maintain a policy of limits to transactions within their platforms.

3. Supervision and banks

The Superintendency of the Financial System will have all the powers to supervise and regulate according to the Creation Law, as well as examine the books, records, operations, and personnel of the bitcoin service provider.

Banks will be able to provide their financial services to a service provider or open accounts to users in bitcoin.

4. Digital wallets for BITCOINS

In the case of digital wallets for bitcoin offered by the State, Banks must provide their services as exchange platforms in such a way they do not generate commission for the final user of said wallets.

5. Efectiveness date

The rule will govern from September 8, 2021.

Source: Diario Oficial 01/09/21